Which statement best defines risk avoidance?

• A. The action that avoids any exposure to the risk whatsoever.
• B. The process of transferring risk to outsourcing.
• C. A method to limit exposure to some extent.
• D. The strategy of accepting residual risk.

Answer: (D)

Risk avoidance means you steer clear of the activity that creates the risk, so there’s no exposure to it at all. In practice, this means choosing not to engage in the risky task or situation. The statement that best matches this idea is the one that says you avoid exposure to the risk altogether. Transferring risk to outsourcing shifts the risk to another party and reduces your exposure but doesn’t remove it entirely. Limiting exposure to some extent describes reducing risk rather than avoiding it entirely. Accepting residual risk is about acknowledging and accepting what remains after controls, not avoiding the risk.